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Abu Dhabi to look into rise in rents

Abu Dhabi will study the higher rents issue and will come up with a solution, says a top economic planner. Speaking to reporters, on the sidelines of the Abu Dhabi Business Forum, Ali Majed Al Mansouri, the chairman of the Department of Economic Development Abu Dhabi said the government will study the supply and demand gap situation in real estate sector.
Some private investors had drawn his attention towards the rents phenomenon which is very high even when there is more supply of housing units than the demand in market. They said rents must reflect the oversupply in housing. The chairman said that the department will look into this matter and would carry out a study and based on its outcome will take appropriate solution.
A senior official at Department of Municipal Affairs recently hinted that around 37 per cent of the registered properties in Abu Dhabi are vacant. Property advisory firm JLL said rents remained stable in the January-March period of the year, while Bayut.com said rental values dropped two per cent in the capital.
"Prime rents remained stable this quarter," JLL said in its report for the first quarter 2016. However, Bayut.com, said the rents dropped two per cent. The housing stock is swelling significantly in the Emirate as from 236,000 in 2013, it increased to 244,000 in 2014; and 245,000 in 2015.
In the first quarter of the year about 1,000 new housing units came online, in the capital the property advisory firm said, while 4000 more units will be added by September this year. In 2017, a housing supply as huge as 6000 apartments and villas is expected to be added and another 7000 in 2018, it said.
Compared to the January-March quarter of 2015, average studio rents in Abu Dhabi adjusted two per cent downwards to Dh64, 000 in Q1'16, while rental values of 1-bed apartment held their ground at Dh 98,000. Two-bed and 3-bed apartment rents fell to Dh137,000 and Dh183,000, respectively, registering marginal decreases of one per cent and three per cent, Bayut.com said.
Rents of four bed apartments adjusted the most during Q1 2016 compared with the same period last year. The rents in this category dipped six per cent and fetched Dh240,000 on average, the property portal said. In April, Abu Dhabi introduced 3 per cent per annum municipal fee on housing rents. - haseeb@khaleejtimes.com